In 1977, he received the John Bates Clark Medal of the American Economic Association, a prize awarded every two years to the economist under the age of 40 who is judged to have made the greatest contribution to economic science. He is among the 10 most influential economists in the world according to IDEAS/RePEc.[2] He is the author of more than 300 research articles in economics and is known primarily for his work on macroeconomics and public finance. He has pioneered much of the research on the working mechanism and sustainability of public pension systems. Feldstein is an avid advocate of Social Security reform and was a main driving force behind former President George W. Bush's initiative of partial privatization of the Social Security system. Aside from his contributions to the field of public sector economics, he has also authored other important macroeconomics papers. One of his more well-known papers in this field was his investigation with Charles Horioka of investment behavior in various countries. He and Horioka found that in the long run, capital tends to stay in its home country – that is to say, a nation's savings is used to fund its investment opportunities. This has since been known as the "Feldstein–Horioka puzzle".

In 1997, writing about the upcoming European monetary union and the euro, Feldstein warned that the "adverse economic effects of a single currency on unemployment and inflation would outweigh any gains from facilitating trade and capital flows" and that, while "conceived of as a way of reducing the risk of another intra-European war", it was "more likely to have the opposite effect" and "lead to increased conflicts within Europe and between Europe and the United States".[3][4]

In 2005, Feldstein was widely considered a leading candidate to succeed chairman Alan Greenspan as Chairman of the Federal Reserve Board. This was in part due to his prominence in the Reagan administration and his position as an economic advisor for the Bush presidential campaign. The New York Times wrote an editorial advocating that Bush choose either Feldstein or Ben Bernanke due to their credentials, and the week of the nomination The Economist predicted that the two men had the greatest probability of selection out of the field of candidates.[5] Ultimately, the position went to Bernanke, possibly because Feldstein was a board member of AIG, which announced the same year that it would restate five years of past financial reports by $2.7 billion. Subsequently, AIG suffered a massive financial collapse that played a central role in the worldwide economic crisis of 2007–08 and the ensuing global recession. The firm was rescued only by multiple capital infusions by the U.S. Federal Reserve Bank, which extended a $182.5 billion line of credit. Although Feldstein was not explicitly linked to the accounting practices in question, he had served as a Director of AIG since 1988. In March 2007, the Lynde and Harry Bradley Foundation announced that one of four 2007 Bradley Prizes to honor outstanding achievement would be awarded to Feldstein.[6] On September 10, 2007, Feldstein announced that he would be stepping down as president of NBER effective June 2008.[7]

Feldstein served as a member of the President's Foreign Intelligence Advisory Board from 2007 to 2009.[8]

Feldstein said in March 2008 he believed the United States was in a recession and it could be a severe one.[9]

As a member of the board of AIG Financial Products, Feldstein was one of those who had oversight of the division of the international insurer that contributed to the company's crisis in September, 2008. In May 2009, Feldstein announced he would step down as a director of AIG.[10] He served as a board member for Eli Lilly and Company.[11] He also previously served on the boards of several other public companies including JPMorgan and TRW.

He currently serves on the board of directors of the Council on Foreign Relations, the Trilateral Commission, the Group of 30 and the National Committee on United States-China Relations.[8] Feldstein was invited to participate in the Bilderberg Group annual conferences in 2008 and 2010 through 2013.[13][14] He is also a member of the JP Morgan Chase International Council, a member of the Academic Advisory Council of the American Enterprise Institute, and a member of the British Academy.

A well-known figure on the Harvard campus, Feldstein taught the introductory economics class "Social Analysis 10: Principles of Economics" for twenty years, being succeeded by N. Gregory Mankiw. The class (since renamed Economics 10) was routinely the largest class at Harvard, and is currently the second largest, trailing only Harvard's introductory Computer Science Course.[15] He currently teaches courses in American economic policy and public sector economics at Harvard College.

Feldstein may have made one of his greatest impacts through the concentration of his students in top echelons of government and academia. These include: Larry Summers, former Harvard president and U.S. Treasury secretary; David Ellwood, dean of Harvard's Kennedy School of Government; and James Poterba, MIT professor and member of Bush's tax reform advisory panel. Lawrence Lindsey, formerly Bush's top economic adviser, wrote his doctoral thesis under Feldstein, as did Harvey S. Rosen, the previous chairman of the president's Council of Economic Advisers, Douglas Elmendorf, the current Director of the Congressional Budget Office, José Piñera, Chile's Secretary of Labor and Social Security during its pension privatization in 1980–1981, Jeffrey Sachs, Director of the Earth Institute at Columbia University, and Glenn Hubbard, Bush's first chairman of the council and now dean of the Columbia Business School.[16]